Millennials are starting to face their next financial crisis, and it’s affecting them much sooner than expected.
Born between 1981 and 1996, millennials are quickly becoming the new so-called “sandwich generation,” a term used to describe people who are taking care of their children and aging parents at the same time.
The phrase has historically been associated with Gen Xers in their late 40s or 50s, but a recent report by online marketplace Care.com updated that definition. It found that the average age today’s caregivers took on dual responsibilities is just 34, with a typical overlap in child- and parent-care giving of 6.4 years.
“These families are carrying an enormous amount, often without enough support and often without anyone acknowledging what they’re doing,” Jill McNamara, a vice president at Care.com, said in a news release.
The report was based on survey responses from 1,000 U.S. adults who are caring for children 14 years or younger and older family members simultaneously. Responses were collected in late June.
‘Blindsiding’ responsibilities and costs of caregiving
Taking on the burden of dual caregiving was “blindsiding,” according to Care.com. Some 80% of respondents said that the responsibilities were sudden and took them by surprise, and 86% said they were completely unprepared for the challenge.
Mothers often feel the brunt of the added responsibilities, reporting 27 hours of caregiving a week (versus 20 hours for fathers). About 8 in 10 moms said they miss out on downtime or “me time” because of their caregiving duties.
“Financially, the picture is equally sobering,” the report states. Due to the additional responsibilities, most caregivers reported having to make major career changes, with some declining promotions, taking on second jobs or leaving the workforce entirely.
Millennials’ careers were especially likely to take a hit, with 61% reporting they had to turn down a job opportunity versus 38% of Gen X respondents.
Regardless of age, caregivers say the costs are financially straining their budgets, as they are split between paying for childcare and elder care. According to a different report, about 1 in 5 families spend at least $30,000 on childcare alone, while hiring even part-time, non-medical help to care for an aging parent costs $35 an hour on average, or approximately $18,200 annually for 10 hours of assistance each week.
These decisions have long-term financial consequences, too. Separate research from the nonprofit Employee Benefit Research Institute found that 56% of working caregivers said caring for a family member had a negative impact on saving for emergencies, and 53% said the same about saving for retirement.
About 3 in 10 working caregivers reported adjusting the age they plan to retire.
Millennials are disproportionately impacted here, as well. Reducing or halting retirement contributions — especially during the peak earning years of a career, which many millennials are in — can have an outsized impact on a person’s nest egg once they’re ready to settle down.
